Stock market: Redrow ditches London and heads for the Shires

The thirst for green spaces in the wake of the Covid-19 pandemic has prompted a leading housebuilder to scale back its operations in London.

Redrow said the decision to focus on its regional divisions reflected a shift in home movers' priorities, including a desire for more inside and outside space.

Shares fell 4% to 442p as Redrow also revealed that profits for the year to June will be substantially below last year, reflecting the impact of Covid-19 and cost of scaling back the London operations to just its Colindale Gardens development.

The group completed 4,032 homes in the year compared to 6,443 the year before. Turnover is expected to be £1.34 billion against £2.11 billion last time.

More encouragingly, Redrow starts the new financial year with a record order book of £1.42 billion and said trading had been encouraging since the easing of lockdown restrictions. This has been driven by high demand from customers using the Help to Buy scheme.

The fall for Redrow shares was mirrored by other housebuilders in the FTSE 100 index, with Barratt Developments and Berkeley Group both down 2%. The top flight was down by 0.75% or 45.57 points to 6,180.20 after heavyweights BP and Royal Dutch Shell both slid 2% in the wake of Shell's big write-down of assets.

The FTSE 100 index, however, remains on course for one of its best quarters since the financial crisis — rising by more than 11% from its first quarter slump.

Smiths Group was the biggest blue-chip riser, charging 7% to 1,388p after announcing a restructuring plan that it hopes will keep it on track for operating margins of 18% to 20%.

The technology group, whose operations range from medical devices to airport security scanners, reported resilient trading in the past four months as underlying revenues rose 1%.

Outside the top flight, online travel firm On The Beach's shares fell 2% despite seeing a “significant increase” in demand for summer holidays in the wake of the government's decision to open air bridges to several European countries.

While booking volumes for the following year remain low, they have been helped by the early release of flights by most major airlines.

The group, which had been trading strongly prior to the Covid-19 pandemic, reported half-year profits of £2.3 million up to the end of March, down £13.4 million on last time.

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